Junior Money Bags, Ltd. v. Segal

798 F. Supp. 375, 1990 U.S. Dist. LEXIS 20089, 1990 WL 412821
CourtDistrict Court, E.D. Louisiana
DecidedOctober 24, 1990
DocketCiv. A. 89-4548, 89-4560
StatusPublished
Cited by8 cases

This text of 798 F. Supp. 375 (Junior Money Bags, Ltd. v. Segal) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Junior Money Bags, Ltd. v. Segal, 798 F. Supp. 375, 1990 U.S. Dist. LEXIS 20089, 1990 WL 412821 (E.D. La. 1990).

Opinion

*377 FINDINGS OF FACT AND CONCLUSIONS OF LAW

McNAMARA, District Judge.

This matter was tried to the court without a jury on a previous day. Now, after considering the evidence and the memoran-da of counsel, the court enters the following Findings of Fact and Conclusions of Law. To the extent any Findings of Fact are deemed to be Conclusions of Law, they should be so considered and to the extent any Conclusions of Law are deemed to be Findings of Fact, they too should be so considered.

FINDINGS OF FACT

1. The parties to the present litigation are Junior Money Bags, Ltd. (“Money Bags”), a Louisiana corporation, Blaine S. Kern (“Kern”), a resident of the Eastern District of Louisiana, and Moey Segal (“Se-gal”), a Canadian citizen with several residences in the United States, but none in Louisiana.

2. To facilitate the construction and operation of an aerial crossing transportation system (the “gondola”) over the Mississippi River in New Orleans, Mississippi Aerial River Transit-Perez, Inc. (“MART”) entered into a contract with Money Bags to lease real estate owned by Money Bags situated on the westbank of the Mississippi River. MART used the land leased from Money Bags to construct and maintain the westbank support tower for the gondola. MART also entered into a lease with the City of New Orleans to construct the tower support on the eastbank of the Mississippi River. MART obtained financing for the gondola through Banque de L’Union Euro-peenne (“BUE”).

3. After MART defaulted on the loan, BUE filed suit in the United States District Court for the Eastern District of Louisiana, Civil Action Number 86-974 (“the BUE suit”).

4. On October 31, 1986, a consent judgment was rendered in favor of BUE and against MART, recognizing and maintaining BUE’s security interest, including its interest in the lease with Money Bags.

5. Subsequently, Segal purchased the judgment in favor of BUE. On May 4, 1989, the district court issued an order in the BUE suit substituting Segal as the judgment creditor, entitled to exercise all of the rights granted by the security agreements and recognized by the consent judgment.

6. Segal caused a marshal’s sale of the gondola and was the successful bidder at the sale held August 10, 1989 at which he acquired all of the property, including the lease with Money Bags, subject to the BUE mortgage.

7. At the time Segal purchased the judgment from BUE and on August 10, 1989 when he acquired the property at the marshal’s sale, he anticipated potential legal problems in acquiring the necessary air and surface rights to make the gondola operational in New Orleans.

8. Segal erroneously thought, however, that the scrap value of the property purchased equalled the purchase price and thus it was a no risk transaction.

9. After the sale, Segal approached both Money Bags and representatives of the City of New Orleans in an attempt to bring the gondola back into operation.

10. The first meeting between Segal and the president of Money Bags, Kern, was not productive. Segal stated that his terms were not negotiable. When Kern demurred, Segal told Kern that he would regret not having given in to Segal’s demands.

11. Segal and his then counsel, William H. Dutel (“Dutel”), approached Kern in the middle of September 1989 to see if Money Bags would grant Segal a servitude agreement. Kern said he thought they could agree but that his attorney, Leon H. Rit-tenberg, Jr. (“Rittenberg”), would have to approve the servitude.

12. On September 19, 1989, Dutel, one of several attorneys who has represented Segal, forwarded to Rittenberg a proposed servitude agreement.

*378 13. Two days later, on September 21, Rittenberg wrote Dutel to ask for a copy of Segal’s deed from the United States Marshal. Although Rittenberg was aware that Segal had been present personally at the marshal’s sale, he did not know if Segal had submitted the bid in his own name or on behalf of some other entity. Despite protests by Dutel that Rittenberg’s request for the deed was unreasonable, later developments (Segal’s transfer of his interest to a shell corporation) showed that the request was not unreasonable.

14. On September 22, 1989, Rittenberg wrote to Dutel to advise him that the servitude agreement was not acceptable and to suggest that Segal consider an amendment to the Money Bags/MART lease. The suggested amendment reduced the cash rental to $1.00 per year.

15. Rittenberg also informed Dutel that he thought an amendment to the lease could be drafted within a day’s time and also assured him that Money Bags was eager to confect an agreement with Segal.

16. On October 3, 1989, Rittenberg again wrote to Segal’s counsel reiterating “that Junior Money Bags is quite interested in working with Mr. Segal to reactivate the gondola and would therefore like to invite Mr. Segal to meet” to work out an agreement.

17. On the same day, Mayor Barthele-my contacted Rittenberg and asked him to attend a meeting in the Mayor’s office. Rittenberg advised the Mayor that he thought it was more appropriate for Money Bags and Segal to negotiate directly, but agreed to attend the meeting.

18. Present at the meeting held on October 3 in the Mayor’s office were Mayor Barthelemy, his administrative assistant Stewart Walker, the Mayor of Gretna, Rit-tenberg, and Larry C. Becnel (“Becnel”), another attorney for Kern.

19. Although invited, neither Segal nor his attorney attended the meeting, but while the meeting was in progress the May- or received a telephone call from Segal. At Segal’s request the Mayor asked Ritten-berg and Becnel to leave the meeting while he spoke on the telephone to Segal.

20. On the same eventful day, Segal began moving some of the gondola cars. The move was not attempted quietly. Instead, Segal engaged a New Orleans-style brass band providing background music to call media attention to the fact that the gondola was leaving New Orleans. The incident was reported on local television and Segal read from a prepared press release.

21. The very next day, October 4, 1989, the City filed suit in state court against Segal and sought a writ of sequestration, alleging that Segal was liable to the City for unpaid rent under the MART/City lease.

22. On October 5, 1989, Segal and the City reached an agreement under which the City dismissed the suit without prejudice, and Segal agreed to give the City at least seven days notice if he decided to move the gondola.

23. On October 11, 1989, Segal’s counsel gave the City seven days notice. In that letter, Segal also notified the City that he would not “exercise his option under the marshal’s deed ... to accept and assume MART’S position with regard to the lease with the City....” Money Bags did not learn of this letter until June 1990.

24. On October 12, 1989, (Exhibit J), Segal’s attorney Dutel advised Money Bags that “[his] client” did not feel bound by any lease and sought permission to remove the gondola tower from Money Bags’ property. The letter did not name Segal as the client.

25.

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Cite This Page — Counsel Stack

Bluebook (online)
798 F. Supp. 375, 1990 U.S. Dist. LEXIS 20089, 1990 WL 412821, Counsel Stack Legal Research, https://law.counselstack.com/opinion/junior-money-bags-ltd-v-segal-laed-1990.